Creature From Jekyll Island by G. Edward

voted to be removed from the Constitution by an overwhelming margin.1 Voicing the sentiment of the majority of the delegates, Alexander Hamilton said: 'To emit an unfunded paper as the sign of value ought not to continue a formal part of the Constitution, nor ever hereafter to be employed; being, in its nature, repugnant with abuses and liable to be made the engine of imposition and fraud.'2

The journal of the Convention for August 16 contains this notation:

It was moved and seconded to strike out the words 'and emit bills of credit,' and the motion ... passed in the affirmative. [The vote cleared by a margin of better than four to one.]3

The Tenth Amendment states: 'The powers not delegated to the United States by the Constitution, nor prohibited by it to the States, are reserved to the States respectively, or to the people.' The power to issue bills of credit is definitely not delegated to the United States, and it is specifically prohibited to the States. Therefore, if any power to issue fiat money legally exists at all, it is reserved for the people. In other words, individuals and private institutions, such as banks, have the right to issue lOUs and hope that the public will use them as money, but government, at any level, is clearly prohibited by the Constitution from doing so.

1. For an excellent summary of the interplay of ideas between the delegates, see Edwin Vieira, Jr., Pieces of Eight: The Monetary Powers and Disabilities of the United States Constitution (New Jersey: Sound Dollar Committee, 1983), pp. 71-76.

2. Alexander Hamilton, Works, Part II, p. 271, as cited by Bancroft, p. 26.

3. Quoted by Bancroft, pp. 39, 40.

THE LOST TREASURE MAP

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A SUGGESTION FOR YOUR CONGRESSMAN

Incidentally, the Constitution has never been amended on this point, nor has the provision that only silver and gold can be used as lawful money. It would be interesting if each reader of this book would send copies to his or her elected representatives in Washington, or at least a photocopy of this section. Every member of Congress has sworn to uphold the Constitution, and you might attach a short note asking them when they intend to begin.

Do not be disappointed if your reply is less than satisfactory.

Politicians have a similar problem to that which judges have. It is permissible to rock the boat from time to time, but they are not supposed to sink it. Suits against the government challenging the constitutionality of our monetary system seldom get to court. It is safer for the justices to decline to accept these cases or to dismiss them as supposedly 'frivolous.' Otherwise they would face a difficult choice. Either they would have to mutilate logic in order to uphold the present inconsistencies—thus, opening themselves to possible ridicule—or they would have to declare in favor of the Constitution and literally cause the collapse of the entire deficit-spending, central-bank mechanism. Such an act would take a considerable amount of courage. Not only would they suffer the wrath of the Establishment that is nourished by that mechanism, they also would have to face a bewildered public which, because of lack of knowledge about the Constitution or the nature of money, could easily be convinced that the judges had lost their minds.

Likewise, it is safer for politicians to respond to inquiries of this kind merely by quoting some self-serving government document which makes our fiat monetary system sound quite legal and marvelously constitutional.

Unfortunately, that is reality. Until the public becomes considerably better informed than it is at present, we cannot expect too much from the courts or from Congress. Bringing this matter to the attention of your elected representatives, however, is still well worth the effort, because the process of education has to start somewhere, and Washington is an excellent place to begin.

Returning to the point of this digression, however, it is important to know that the federal government was given a precisely limited monetary function: 'to coin money' and to 'regulate the value thereof.' In view of the fact that gold and silver coin was 318 THE CREATURE FROM JEKYLL ISLAND

specifically defined as the only kind of money to be allowed, there can be no doubt of what was meant by the first half of that power.

To coin money meant to mint precious-metal coins. Period.

The second half is equally clear. Both in the Constitution and in the discussions among the delegates, the power to regulate the value of gold and silver coin was closely tied to the power to determine weights and measures. They are, in fact, one and the same. To regulate the value of coin is exactly the same as to set the nationally accepted value of a mile or a pound or a quart. It is to create a standard against which a thing may be measured. The wording of this section of the Constitution can be traced to the original Articles of Confederation which further clarifies the meaning that was generally understood at that time:

The United States in congress assembled shall... have the sole and exclusive right and power of regulating the alloy and value of coin struck by their own authority, or by that of the respective states—fixing the Standard of Weights and Measures throughout the United States.

The intent, therefore, was simply for Congress to determine the exact weight of a precious metal that would constitute the national monetary unit.

THE ORIGIN OF THE DOLLAR

At the time of these deliberations, Spanish silver coins, called pieces of eight, had already become the de facto monetary unit. An official commission had been established by the Continental Congress to sample the circulating coins in the country and determine their average value by weight and purity. Charts were published, and all coins of various origin were listed by comparative value.

Congress was already 'regulating the value of' the nation's money by the time the Constitution was drafted. How these coins became dollars is an interesting story. Edwin Vieira tells us:

Monetary historians generally first associate the dollar with one Count Schlick, who began striking such silver coins in 1519 in J o a c h i m ' s T h a i , B a v a r i a . T h e n c a l l e d 'Schlicktenthalers' o r

'Joachimsthalers,' the coins became known simply as 'thalers,'